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How California Progress Fits With Federal Report

by David Gorn

Monday, January 31, 2011

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How California Progress Fits With Federal Report

by David GornMonday, January 31, 2011

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A new federal report on lowering health insurance costs has a distinctive California flavor to it.

One of the main points of the report from the Health and Human Services agency is to quantify the savings to families and individuals who participate in a health benefits exchange. Since California is the first in the nation to establish a post-health-reform exchange, this state is a bit of a poster child for how the health reform law will work.

Insurance Commissioner Dave Jones joined national health secretary Kathleen Sebelius in a conference call on Friday to discuss the new federal report.

The report shows "major savings for families as [health care reform] begins to takes shape," Sebelius said. "A middle-class family getting health care insurance through one of the new exchanges ... could save as much as $2,300 a year on their health care coverage bills."

The numbers are a solid estimate of actual savings beginning in 2014, she said. This is "finally putting affordable health insurance within reach," Sebelius said.

At the heart of the report is the promise of the state exchanges, where insurance buying power is pooled. According to Sibelius, it costs small business owners 18% more than large businesses for the exact same coverage, and that's what she expects the exchanges to reverse. And Jones said that California has already made the move to garner those savings.

"One of the key barriers to health care has been the skyrocketing cost of health insurance coverage, and small businesses have been hit particularly hard with rate increases," Jones said. Tax credits are currently available for those businesses, he said, and more savings are on the way in 2014.

"California is the first state in the nation to pass legislation to set up the health benefits exchange," where, he said, the family savings are substantial, and individuals also can save up to $800 a year on health insurance.

"Making health insurance coverage more affordable is critical," Jones said. "This important report shows that the Affordable Care Act will do exactly that."

Jones said one federal provision that went into effect last year could save families money now. Children with pre-existing conditions can no longer be denied coverage, and adults in California can join a pre-existing insurance plan.

"We are strongly encouraging families to join by March 1," Jones said, "in order to ensure that they pay a lower premium than would be charged in open enrollment."

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About Capitol Desk

Capitol Desk is a daily report covering health care policy and politics from California Healthline's Sacramento Bureau. Have an idea? Let us know.

About David Gorn

Senior Reporter David Gorn is based in Sacramento and covers health care and policy. He has been deputy news director of KQED public radio, a reporter for National Public Radio, and an editor at a number of newspapers and magazines across Northern California, including the Santa Rosa Press Democrat and San Jose Mercury News. Gorn has also taught journalism at San Francisco State University. You can email him at capitoldesk@chcf.org.